Korea Investment & Securities announced on September 4 that it has raised its target price for Silicone Two from 60,000 won to 65,000 won, citing attractive valuations and strong performance expectations. The firm maintained its 'buy' rating.
Kim Myung-joo, a researcher at Korea Investment & Securities, stated, "While there may be a healthy correction in the cosmetics sector in September, Silicone Two's attractive valuation makes it a safe investment within the sector." He added, "Although shipping costs have recently increased, the proportion of shipping costs relative to Silicone Two's revenue in the third quarter is expected to be similar to that of the second quarter, due to inventory accumulated in the second quarter, which may lead to a decrease in shipping volume for the third quarter."
In the second quarter, the U.S. accounted for 19.2% of Silicone Two's total revenue. The company's gross profit margin (GPM) for the second quarter improved by 2 percentage points compared to the previous quarter, with over 1 percentage point attributed to the strong dollar and increased sales in the U.S.
Sales of Silicone Two's cosmetics are expected to rise in Europe during the third quarter. Kim noted, "This year, the entry of Korean cosmetics into offline channels in Europe has begun in earnest," and added, "Demand for Korean cosmetics in the European market is likely to continue to rise steadily, with Silicone Two likely to secure new clients, including distribution channels under CVC Capital such as Douglas."
However, exchange rates are seen as a variable. Kim stated, "Thanks to the steadily increasing number of clients, Silicone Two's performance is expected to remain solid in the second half of the year," but cautioned that a sustained strengthening of the won could negatively impact the company's results.
Kim Myung-joo, a researcher at Korea Investment & Securities, stated, "While there may be a healthy correction in the cosmetics sector in September, Silicone Two's attractive valuation makes it a safe investment within the sector." He added, "Although shipping costs have recently increased, the proportion of shipping costs relative to Silicone Two's revenue in the third quarter is expected to be similar to that of the second quarter, due to inventory accumulated in the second quarter, which may lead to a decrease in shipping volume for the third quarter."
In the second quarter, the U.S. accounted for 19.2% of Silicone Two's total revenue. The company's gross profit margin (GPM) for the second quarter improved by 2 percentage points compared to the previous quarter, with over 1 percentage point attributed to the strong dollar and increased sales in the U.S.
Sales of Silicone Two's cosmetics are expected to rise in Europe during the third quarter. Kim noted, "This year, the entry of Korean cosmetics into offline channels in Europe has begun in earnest," and added, "Demand for Korean cosmetics in the European market is likely to continue to rise steadily, with Silicone Two likely to secure new clients, including distribution channels under CVC Capital such as Douglas."
However, exchange rates are seen as a variable. Kim stated, "Thanks to the steadily increasing number of clients, Silicone Two's performance is expected to remain solid in the second half of the year," but cautioned that a sustained strengthening of the won could negatively impact the company's results.
* This article has been translated by AI.
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